Month: February 2019

We are pleased that our two priorities bills WWI helped craft, introduce, and are pushing have already been voted out of their committees of origin. These bills are HB 1416/SB 5394, our social media/website use modernization bill, and HB 1563 adding field trip and 18-20 year old internships in winery production areas allowances to the current Class 15 permit our higher educational viticulture and enology programs utilize now (commonly known as the “taste and spit” permit).

HB 1416/SB 5394: Concerning liquor licensees’ use of social media and website to promote events

We are now working on getting HB 1416 out of House, so the House can vote on the bills moving through the legislative process. SB 5394 and HB 1563 already moved out of their respective Rules committees, and we are optimistic the bills will be voted on by the full Senate and House within the next week or two.

Beyond these bills, there are a myriad of other bills introduced this session that either directly or indirectly impact our industry. For example, we are helping guide a bill through that puts in statute language allowing wineries to recork wine purchased onsite so a customer can take it home. This is a common practice in wineries now, but the bill exists because of an enforcement issue and a general sense that it’s better to have this important privilege spelled out within our domestic winery license.

Overall, the themes of this legislative session revolve around labor regulations, environmental impacts, and most importantly whether Senate and House leadership have the votes and the public support to raise taxes, create new taxes/fees, and what industries will be impacted. Alcohol taxes are often an “easy” target when these conversations heat up in Olympia, so we continue to be on high alert throughout the session.

HB 1389 is a bill supported by the national wholesalers that would require common carriers (like UPS/FedEx and local carriers) that ship alcohol to file monthly reports with the Liquor and Cannabis Board and Department of Revenue on all details (many very sensitive) of each shipment. WWI worked aggressively with the prime sponsor, Chair of the committee, and Republicans on the committee to alter the bill into something entirely different that might be more effective in getting at how we curb illegal alcohol entering our state. We are excited to share that we succeeded in amending the bill so our wineries’ ability to use common carriers to ship wine will not be harmed. As amended, the bill does the following:

• Removes the entirety of the underlying bill and directs the LCB to investigate illegal alcohol shipments made to Washington consumers and liquor licensees;
• Requires the LCB to include, as a part of its investigation, the extent of the illegal alcohol shipment problem in the state;
• Authorizes the LCB, if necessary, to: (1) work with stakeholders and determine the most effective means to address the problem; and (2) develop legislative proposals to stop illegal shipments of alcohol and enforcement against making such shipments; and
• Requires the LCB to submit a report with its findings to the Legislature by December 31, 2019.

We are excited to announce that the hard work of WineAmerica as well as the national beer and spirits associations led to the long anticipated re-introduction of the Craft Beverage Modernization and Tax Reform Act. The new bill will be known as the Craft Beverage Modernization and Tax Reform Act of 2019, or CBMTRA, and is the formal beginning of our united effort to make permanent the federal craft beverage excise tax reform our wineries are currently enjoying via signficant tax savings. The lead Senate sponsors are once again Senators Ron Wyden (D-OR) and Roy Blunt (R-MO). The lead House sponsors on the bill are Representatives Ron Kind (D-WI) and Mike Kelly (R-PA).

The bill includes all of the provisions from the amended two year version currently in place but set to expire 12/31/19. It makes all of the new credits permanent and includes an extra $15 million for the TTB. The language of the bill also retroactively fixes two of our three implementation issues from the last year. The new language will allow for credits to be taken on bond to bond transfers, which will eliminate the “alternate procedure” that was implemented by TTB last year to mitigate the issues with bonded wine cellars. Additionally, bulk wine transfers from winery to winery will be eligible for the credits. Because of the retroactive aspect of the bill, anyone that was forced to pay a higher tax due to the transfer issues will be able to see retroactive savings.

The bill as introduced does not correct issues with wine produced at a custom crush facility, but WineAmerica is working with the Washington Wine Institute and many other wine associations on strategies to amend this unfortunate error in the bill. Our lobbying efforts will ramp up immediately, and WWI leaders will be making several trips to Washington D.C. this year to help get this bill to the finish line. We will keep all of our members up-to-date as this work continues throughout this year.